Banks that repossess cars offer below-market prices to smart investors who know where to spot a good deal. You will see automobiles from the present year and vehicles that have few mechanical issues at greatly reduced rates. Financial institutions take back cars on which they loan when a borrower fails to make monthly payments. Banks that repossess cars offer them to buyers; such sales help compensate the banks for the money they lost due to delinquent former car owners, and enable them get back to their primary business of lending money. Sales of repossessed cars typically take place at auctions.
- Skill level:
Find banks that sell repossessed vehicles. Contact financial institutions in your city and find out when the next car auction will take place. This event will give you the chance to find cars of this type.
Establish contacts with businesses that sell this form of automobile. Look in the town directory to find companies that sell repossessed cars. You may also go online to popular auction sites such as Ebay.com to find dealers in your town that specialise in these types of sales.
Get the money to pay for your purchase. Use cash from your savings account to fund the transaction. If you do not have cash, consider opening up a line of credit with your bank. Work out a relationship with a friend who will front the cost of each deal you find online or offline.
Scrutinise the vehicle before you buy it. Ask someone who knows about automobiles to accompany you to the auction and look for any obvious repairs or issues that lie beneath the hood. You will also want to know if the vehicles you view have a history of any accidents or fender-benders.
Familiarise yourself with how an automobile auction works. You will need to know the total cost to buy a lender-owned vehicle. Some auctions charge bidders a fee to come into the event. Do not make an offer on any vehicle that you do not plan to buy because you run the risk of losing your money.
Tips and warnings
- Find out when the auction holders require you to pay for your vehicle. These times may vary because some venues want payment at the event, while others give you three days to complete the sales process.
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